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Prime Minister Peter O’Neill has announced a reform for the public service, saying the sector continues to overspend by more than K300 million a year.

Addressing the business community in Port Moresby yesterday, O’Neill said: “We are going to have a large reform in the public service structure. Public Service continues to overspend over K300 million a year on maintaining a public service structure in our country.

“This sort of expenditure is unsustainable for Papua New Guinea.
“That is why a large reform package will be set up where it will mean we will streamline some of the departments so that they can perform better with other departments that

are related and, we will want them to be bit more efficient, quality-driven. That would mean we may have to retrench some of our people into sectors where they are needed most.

“We are open to consultation during the reforms.
“Business and government need to work together for better outcomes.

“Our government is proud to have the mandate to continue driving positive change.
“We are grateful for the support given by our people to continue our core policy agenda.
“We are also grateful for the support of the business community for our government.
“We will again be a business-friendly government and consult with all stakeholders.”

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Northern Governor Gary Juffa has called on the Government to set up a special parliamentary committee to address the taxation issue in the country.

He said the current tax regime is very hostile to Papua New Guineans and genuine investors with PNG’s tax rates currently the highest in the Pacific.

Juffa claimed that a significant portion of illegal and semi illegal businesses are earning profits, especially in the forestry and fisheries sectors as well as property and other poorly regulated businesses.

He added that such illegal entities are avoiding taxes and getting away with it, leaving the shortfall to be met by genuine investors like PNG SMEs and PNG wage earners.

“These non-genuine transnational criminal type entities were engaged in elaborate tax avoidance schemes such as transfer pricing and undervaluation, avoiding taxes and getting away with serious tax crimes while those who fronted up to pay their taxes were being penalised and punished.”

Juffa further reiterated that the Government needed to take drastic measures, including setting up a special parliamentary committee comprising MPs from both sides of the House who have the experience and knowledge of such matters.

He added that this will effectively address the issue of declining State revenue mainly through leakage and ineffective taxation administration.

Meanwhile, Juffa said some mines were among those who barely paid their full portion of taxes and a few foreign wage earners were earning an income in PNG illegally while on business and tourist visas.

*** Serious Questions Remain About the Use of Kavieng K40 Million DSIP ***

The Prime Minister, Hon. Peter O’Neill CMG MP, has raised serious questions about what happened to more than K40 million delivered to the Kavieng District over the past four years.

PM O’Neill said District Services Improvement Program (DSIP) funding has delivered great change for many other districts around the Nation, but not in Kavieng.

“It is within my right to say that there is no evidence of development from the more than K40 million in DSIP delivered to the Kavieng District over the past four years,” PM O’Neill said.

“Why has the K40 million given to the Kavieng District not been spent on improving Kavieng?

“Ben Micah’s focus should be on serving the neglected people of Kavieng, instead he is being driven by selfish grandstanding that is driven by ego. A leader should be able to accept any criticism leveled against them based on fact, instead of crying foul and lashing out with unsubstantiated criticism against others.

“A leader should be able to take criticism, learn from it, and strive to do a better job at delivering development and services for the people.

“When I went into Parliament in 2002, the Somare Government did not give any support to districts in the country. Not even a Toea went to Kavieng District, not a Toea from the Government went into my district of Ialibu-Pangia.

“That is why all the services were run down right around the country. All the roads were run down, law and order was a big issue, schools were run down, health services and everything was run down.

“But when we went into government in 2012, we changed all this and now all districts receive direct funding in our country.

“For the first time in the history of our country, funding is going straight to the districts because I want it to reach people.”

The Prime Minister said the personal attacks by the Kavieng member are unfortunate, but that is the way he has handled himself since leaving Government.

“Ben Micah really should remember that in 2011, when he was bankrupt and jobless, I picked him up from nothing and gave him a second chance.

“The bad decisions he has made in recent years have led him to where he is today – alienated in his own party and disowned by his people.

“His troubles today are a demonstration of disloyalty and ego, and he has a price to pay.

The Prime Minister said despite questions over the use of Kavieng’s DSIP, the National Government has continued to directly fund projects in New Ireland Province.

“We are about to finish work on the road going down to Buluminski, and we have completed renovations of the Kavieng Hospital and airport fencing, and many roads and jetties and other projects were directly funded by the National Government. All school fees and hospitals have been funded by the National Government.”

*** Tertiary Assistance Fund to be Established: O’Neill ***

A tertiary education assistance fund will be established to support students whose parents are unable to pay for their tuition fees.

Prime Minister Peter O’Neill said his People’s National Congress Party will push for the funds establishment if it forms government in September.

He said the fund will be built on the Free Education Policy the Government has funded in the last 6 years.

“Also, we want to expand the program up to the tertiary education, we cannot only educate our kids up to year 12 and allow them to run around and do their own thing, which is what our system has been doing in the last 40 plus years,” O’Neill said on FM 100 Talk Back show on Thursday.

“So what we have to do is expand on it, and we have our team to look at some of the examples around the world, and we have come up with a new issue of establishing a ‘Government Endeavour Fund’.”

O’Neill side the fund will be independently managed and will be self-financing.

“If parents are unable to afford to send their kids to universities or technical colleges, their children can borrow the money themselves and will be interest free, and most flexible repayment term when they start working and earning income over their life time,” PM said.

“This means that they repay the original amount of money back to the fund and the fund will be able to educate future kids because the funds money are not been depleted.”

THE Bank of Papua New Guinea (BPNG) has strongly warned that K160 million in paper money it had designated to be destroyed had been hijacked, and some of it have found their way back to the country.
The bank said of the total amount, only K1 million has been recouped and now held in custody to be destroyed, while intense investigations are being carried out on the whereabouts of the rest.
The bank is also cautioning the public not be fooled by these old notes, which are illegal and cannot be used for business transactions.
With the national election in process and with large sums of cash in circulation, BPNG has urged members of the public to be wary and to report any sightings of these notes.
BPNG governor Loi Bakani said the demonitisation exercise had been undertaken by the Central bank to replace the paper money with the polymer or plastic notes.
Mr Bakani said the paper notes in denominations of K2, K5, K10, K20, K50 and K100 were sold to a recycling company in Europe in 2013.
They were loaded in a container for shipment to Europe but the container was hijacked.
He said the bank had yet to establish how this had happened.
“The border authority reported this was fake money that had come in from Indonesia. This is part of it. We have visited the boarder and we are also working with the banks and authorities on the Indonesian side on how best we can address this issue and get the money out of there.
“The unfortunate thing though is that some of it, mostly K20 and K100 are finding their way back into the country and people may think the polymer notes are fake money and won’t accept it. That is why awareness is vital.
“Because the paper money has been demonitised, it has no value and is not recognised as legal tender,” the governor said.
“The public is advised to check the serial numbers at the bottom of the bank notes. If you are receiving or are holding onto any of these paper notes with serial numbers that fall within the range of the serial numbers indicated, reject them outright.”
The serial numbers which will be published are as follows:
n K2, with a prefix’ of ABJ-AJS with numbers of a low 000001 and high of 003000;
n K10, with a prefix’ of AC-AY with numbers of a low 030000 and high 031000;
n K10, with a prefix’ of NBP-NES and numbers with a low 160000 and high of 173000;
n K20, with a prefix’ of BPNG with numbers with a low 0000001 and high of 3000000;
n K50, with a prefix’ of HTT-HUU with numbers with a low 080000 and a high of 090000; and
n K100, with a prefix of BPNG, with numbers of a low 0000001 and high of 6000000.
The governor said the demonitisation exercise had run for four years and those holding onto old notes had enough time to exchange them for polymer notes.
The time had lapsed and the bank would not be doing any exchanges because they are no longer legal tender.

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The Government owes an estimated K2 billion in unfunded superannuation contributions for public service members of Nambawan Super Limited (NSL).

This was revealed during NSL’s employer conference held in Port Moresby on Friday.

NSL Manager Legal, George Koi, during his presentation on ‘unfunded liability said they estimated around K2.1 to K2.2 billion in employer contributions is owed by the State for many public servants.

He said they range from teachers to members of the disciplined forces.

Koi said after a reform in 2003, the State was required to contribute 8.4 per cent as employer contributions towards public servants superannuation’s.

However, between that year and 2009, the state did not fully meet its end of the bargain, and only provided partial payments.

It was only after 2009 that the state began paying in full employer contributions, but recently fell behind again.

“This is not an issue for those in the private sector. This is only for those of us in the public service, and for those of us employed prior to 2009. So for teachers, our service men in the corrections service as well as the police force are most of those affected in that category.

Koi added that between November 2014 and November 2015, NSL paid and the state didn’t pay their bill totaling to K135 million.

He said of the K135 million outstanding, only K75 million has been received while K66 million is yet to be paid to the fund.

However as of January 2017, NSL has calculated again the outstanding which has increased again to K113 million.

NSL Chairman, Anthony Smare, announced last month that the fund had begun legal proceedings against the state to recover the funds on behalf of its members.

Koi clarified that NSL is seeking orders to determine the exact amount owing to the fund and orders for the state to pay.

In the meantime, NSL is negotiating with the state to find an amicable solution to pay the outstanding claim.